Mark Carney’s Pre-Fab Fiction
Ottawa, ON – On March 29, Mark Carney promised $25 billion in debt financing and $1 billion in equity financing to Canadian prefabricated home builders as part of his plan to double down on the Lost Liberal Decade of doubling housing costs.
Carney and the Liberals claim that this plan for prefabricated homes will spur massive homebuilding, but the facts show their plan is pure fiction.
First, the delays that Canadian developers face when building homes are primarily not an issue of the speed of construction or cost. Delays are caused by various levels of government, with city approvals now taking up to 31 months in Canada’s largest cities. Rather than spending billions to set up a massive government bureaucracy, the Liberals should be listening to home builders who have been clear that what they need is for the government to get out of the way.
Secondly, Canada does not have the capacity to build the promised tens of thousands of prefab homes. Developing the factories, the supply chains, and the additional workforce to do so would take years, leaving Canadians facing the same housing affordability and supply crisis that the Liberals have caused over the last ten years.
Third, if prefabricated homes were significantly cheaper to build, homebuilders would already be using them at scale to cut costs and maximize returns. The fact is that the cost differences are negligible, hence why massive government intervention is required to get projects off the ground. Not to mention that the cost of land remains equally prohibitive to building these homes where they are needed.
But while this policy won’t make a difference for Canadians searching for an affordable home, it could be immensely profitable for those invested in prefabricated home companies like Mark Carney’s company, Brookfield. Prefabricated home companies like Modulaire, which is owned by Brookfield and bills itself as “Europe and Asia Pacific’s leading specialist in modular services and infrastructure.” Modulaire, of course, was acquired by Brookfield while Carney was chair at Brookfield Asset Management.
This raises the question whether this is yet another policy that will benefit the interests of Mark Carney and Brookfield, but not Canadians. This will not build homes faster, but it very well could help turn a profit for Carney through his continued financial interests in the company which he refuses to disclose.
But there is hope for Canadians who want a change from the last decade of failed Liberal policies that doubled housing costs and put the dream of home ownership out of reach for millions of Canadians. A new Conservative government will build 2.3 million new homes over the next five years by axing the GST on new homes, incentivizing municipalities to cut red tape and development taxes and actually building homes, not bureaucracy.